Without insurance, people and businesses would have to incur all the risk themselves. If a major loss meant certain financial ruin, people wouldn’t be able to borrow money to buy a home or start a business. Simply put, insurance restores your possessions to their condition before the insurable incident occurred, and gets your life back to normal.
In this discussion we’ll focus on property and casualty insurance, also known as general insurance, which involves all types of insurance other than life and health insurance. It covers:
- Property risk: the financial loss that results when owned property is destroyed or damaged.
- Liability risk: the injury or damage to other people that results from people’s actions.
Personal insurance. Nearly every type of personal property can be insured. Most commonly this includes:
- Your home and its contents. Insurance packages will be tailored to whether you own or rent. Keep in mind that strata property owners need a separate insurance policy for their unit; the building policy does not cover your belongings or your upgrades to your unit.
- Motor vehicles, boats, and recreational vehicles.
- High-value possessions such as sports equipment, jewellery, art, and other collections.
- Talk to your insurance broker about extra coverage for personal items when they are used for commercial purposes, such as a home-based business or hosting strangers in your home.
Business insurance. In addition to providing coverage for loss, damage and liability on both the premises and contents, business owners can buy protection for the indirect costs associated with having to suspend operations while recovering from an incident.
In many situations, (for example, for your car and home if you have borrowed to buy them) insurance is mandatory. There is, however, considerable range in the amount of protection you choose to buy. Determining the right amount of coverage is one of the things that a broker is trained to help you with. Your broker will help you balance acceptable risk and the premium you’ll have to pay.
Insurance is sold on the principle of utmost good faith. The law requires honesty on both sides: customers should accurately state their needs, and brokers must provide unbiased advice about an adequate level of insurance for those needs.
Always seek clarification about the insurance products or services you are purchasing. Occasionally a misunderstanding or failed expectation can occur.
First, let the manager at the brokerage know about your problem. In many cases it may have been due to a lack of communication and can be easily rectified. Give the brokerage manager the opportunity to correct the problem.
Next, there are a number of organizations that can assist you: